The problems with 'cord cutters' and the collapsing of pay TV (cable TV) has not gone unnoticed at BSKYB according to The Telegraph.
They are preparing a major overhaul of their service and their set-top boxes to allow customers access to any programme on any device. They are also looking at Sky+, using the cloud (rather than the local box drive) to store programmes allowing greater accessibility.
The multi-screen technology will also allow greater advertising opportunities possibly targeting customers by post code. Direct selling.
They also plan to introduce 4K (very high definition programming) and a 'film to own' service.
Of course, Sky aren't the only ones bringing Television across many devices with Google and Amazon already in the market and Netflix is signing deals. Traditional TV will become just a part of their subscription service (funny how it used to be the other way around!). Apple of course, are there too.
But good to see traditional TV broadcasting embracing digital and getting into the space rather than usually, running from it. Sky, at least, are responding.
The only downside to the story is that it's "a year or two away" which is a long time in politics as they say - but a generational time in digital. They'll need to move faster, but at least, they're moving.
They call it 'cord cutting'.
That's where you stop paying your expensive monthly cable or satellite subscriptions in favour of watching online video. You 'cut the chord'.
In fact it's likely that young adults will never pay for cable in their lives having been brought up online, so the cable future is bleak anyway. And the number of 'cord cutters' is increasing at a dramatic rate year on year.
In turn, as you'll read in another blog here, as subscribers are moving away from cable so too is the cable viewing audience obviously declining (by -11% last year). Less subscribing, less watching and ultimately, less advertising.
Of course too, the highest percentage of cord cutters are those with a Netflix or Hulu account already - as you'd expect - but in recessionary times with so much content online, subscriptions are being cut anyway. At averaging $200 a month, it's no wonder.
Pay TV is going to be in decline forever. And on this side of the world, that means 'Sky'. What they might resort to is monthly caps or limits on access with a more "tiered" approach - practically 'pay-per-view'. If I was them, that's what I would do.
I do understand that there's more revenue in the stability of monthly subscriptions and that's one model. But given the swiftness and steepness of the decline of that model, you have to do something else or be eaten.
Introduce a pay-per-view option to supplement your subs.
But what it does point to, is the future for growing demand for online video, is bright.
Fox, that great bastion of free right wing media (actually, I watch it a lot so I mean that tongue-in-cheek) are threatening to come off "free to air" and to move towards cable or pay-per-view.
In other words, just be available to subscribers.
And the reason? Online IPTV re-broadcasters (in this case 'Aereo' in particular) whom are offering live Fox and CBS and ABC and others online for free. They're simply, re-sending the TV signals online for a small fee. And the courts have upheld their right to do so. It would seem that these re-broadcasters have set themselves up exactly within the limits of existing laws.
So no need for an antenna or set-top box, you can now see Fox online through Aereo and that's what's bothering Fox. Aereo also allows you to record programmes in the cloud and of course, is available on multi-platforms to watch "as you go".
It means that traditional TV Companies are now losing control of their signal, their content and ultimately, their advertising. So if Fox became subscriber only, it would starve IPTV such as Aereo, of content. But then too, it would lose its advertising revenue because numbers of viewers would dramatically reduce.
It would also cause problems for affiliates of Fox (such as Sky) who may no longer get access to that content either.
IPTV is a threat to broadcasters - of that, there's no doubt.
However, one wonders why they don't join the party and develop their own IPTV strategy? In other words, come together as an online brand and compete.
So many times, we've seen online destroy businesses who sat back and depended on legal action rather than, get into the space and fight. This to me, looks like another example.
Feels a bit like a Fox episode of The Simpsons.
The growth of Netflix since 1997, the online movie/tv streaming site, has been quite extraordinary with a forecast of 30 million members by year end (Sky has 10 million). But as predicted, they've now ventured into the area of programme buying, competing directly with traditional broadcasters.
Something we've talked about before here http://streamabout.blogspot.ie/2012/07/netflix-stream-one-billion-hours-in.html
This is the first move for an online broadcaster into the offline world. In particular, they're going to hurt BSkyB.
BSkyB's stranglehold on premium rights to Hollywood movies is going to be broken as Netflix CEO Reed Hastings (that's his picture on top) has vowed that Netflix is going to heavily bid for those rights - and they have the cash.
He is determined to win. Already earlier in the year, BSkyB had to suffer a 40% increase in UK football rights following a bid war with BT. The Sunday Telegraph has seen BSkyB documents which clearly identify Netflix as a major potential threat.
NetFlix has just announced today that already it has 1 million users in Ireland and the UK and with movie rights, it will switch customers away from BSkyB.
The Telegraph quotes Hastings as saying, "The main rival is BSkyB with Sky Movies and Sky Atlantic - they're the ones with the big content".
The key here too is that Netflix can offer a movie streaming service at a much lower cost than Sky as well as being available on a myriad of devices.
"Sky is terrified of Netflix" a source close to the company has said. And so they should be....as the company turnover increases to 1.8 billion usd in the first half of 2012. Whilst its share price is declining, this is on the back of lower profits driven by the insatiable desire to launch worldwide and therefore, the costs of doing so. Hastings has always said that he's in the long term game.
Netflix is ploughing back its profits into a drive for world domination. Although Hasting's own encashment of 43m usd in shares was viewed poorly by the markets and is being legally challenged. He's also a small investor in Facebook and a Director at Microsoft.
There is no doubt, having dispensed with the retailers of old video rental, Hastings is now going after traditional TV. Online streaming is coming of age and will become the dominant way of the future to watch movies. Especially as devices such as Apple TV, arrive on the market.
And good luck to them.
Online goes from strength to strength.
Do you still doubt it?
